tÜrk hava yollari anonİm ortakliĞi and its subsidiaries · 2016. 8. 19. · tÜrk hava yollari...

TÜRK HAVA YOLLARI ANONİM

ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim

Financial Statements As At and For

The Six-Month Period

Ended 30 June 2016

TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Balance Sheet as at 30 June 2016 (All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

1

Reviewed Audited

ASSETS Notes 30 June 2016 31 December 2015

Current Assets

Cash and Cash Equivalents 5 1,042 900

Financial Investments 6 66 62

Trade Receivables

-Trade Receivables From Non-Related Parties 562 361

Other Receivables

-Other Receivables from Related Parties 9 3 3

-Other Receivables from Non-Related Parties 10 1,066 1,382

Derivative Financial Instruments 28 141 100

Inventories 231 216

Prepaid Expenses 105 74

Current Income Tax Assets 26 11 12

Other Current Assets 33 36

TOTAL CURRENT ASSETS 3,260 3,146

Non-Current Assets

Financial Investments 6 32 1

Other Receivables

-Other Receivables from Non-Related Parties 10 604 1,058

Investments Accounted by Using Equity Method 3 228 246

Investment Property 1 1

Property and Equipment 11 13,390 11,415

Intangible Assets

- Other Intangible Assets 12 82 89

- Goodwill 12 12

Prepaid Expenses 506 415

TOTAL NON-CURRENT ASSETS 14,855 13,237

TOTAL ASSETS 18,115 16,383

The accompanying notes are an integral part of these condensed consolidated interim financial statements.


Condensed Consolidated Interim Balance Sheet as at 30 June 2016 (All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

2

Reviewed Audited

LIABILITIES Notes 30 June 2016 31 December 2015

Current Liabilities

Short Term Borrowings 7 250 250

Short-Term Portion of Long-Term Borrowings 7 and 13 956 763

Other Financial Liabilities 8 6 15

Trade Payables

-Trade Payables to Related Parties 9 135 132

-Trade Payables to Non-Related Parties 591 539

Payables Related to Employee Benefits 146 121

Other Payables

-Other Payables to Non-Related Parties 76 84

Derivative Financial Instruments 28 260 568

Deferred Income 18 1,501 1,104

Current Tax Provision 26 4 10

Short-Term Provisions

-Provisions for Employee Benefits 14 64 52

-Other Provisions 14 13 15

Other Current Liabilities 215 218

TOTAL CURRENT LIABILITIES 4,217 3,871

Non- Current Liabilities

Long-Term Borrowings 7 and 13 8,541 6,636

Other Payables

-Other Payables to Non-Related Parties 11 12

Deferred Income 18 11 16

Long-Term Provisions

-Provisions for Employee Benefits 16 132 119

Deferred Tax Liability 26 761 887

TOTAL NON- CURRENT LIABILITIES 9,456 7,670

Equity

Share Capital 19 1,597 1,597

Items That Will Not Be Reclassified to

Profit or Loss-Actuarial (Losses) on Retirement Pay Obligation 19 ( 6) ( 8)

Items That Are or May Be Reclassified to

Profit or Loss

-Foreign Currency Translation Differences 19 ( 80) ( 84)

-Fair Value (Losses) on Hedging Instruments

Entered into for Cash Flow Hedges19

( 86) ( 327)

Restricted Profit Reserves 19 36 36

Previous Years Profit 19 3,628 2,559

Net (Loss) / Profit for the Period ( 647) 1,069

TOTAL EQUITY 4,442 4,842

TOTAL LIABILITIES AND EQUITY 18,115 16,383



Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income

For the Six-Month Period Ended 30 June 2016 (All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

3

Reviewed Not Reviewed Reviewed Not Reviewed

PROFIT OR LOSS Notes

1 January -

30 June 2016

1 April -

30 June 2016

1 January -

30 June 2015

1 April -

30 June 2015

Sales Revenue 20 4,632 2,444 4,789 2,570

Cost of Sales (-) 21 ( 4,290) ( 2,221) ( 4,035) ( 2,122)

GROSS PROFIT 342 223 754 448

General Administrative Expenses (-) 22 ( 165) ( 83) ( 135) ( 62)

Marketing and Sales Expenses (-) 22 ( 663) ( 346) ( 569) ( 302)

Other Operating Income 23 81 8 158 99

Other Operating Expenses (-) 23 ( 6) 1 ( 16) ( 9)

OPERATING (LOSS)/PROFIT BEFORE INVESTMENT ACTIVITIES ( 411) ( 197) 192 174

Income from Investment Activities 24 56 35 34 21

Expenses from Investment Activities 24 ( 20) ( 20) - -

Share of Investments' (Loss) / Profit Accounted by

Using The Equity Method 3 ( 2) 22 12 25

OPERATING (LOSS)/PROFIT ( 377) ( 160) 238 220

Financial Income 25 75 59 443 121

Financial Expenses (-) 25 ( 517) ( 182) ( 109) ( 16)

(LOSS)/PROFIT BEFORE TAX ( 819) ( 283) 572 325

Tax Income (Expense) 172 57 ( 166) ( 72)

Current Tax Expense 26 ( 14) ( 4) - -

Deferred Tax Income / (Expense) 26 186 61 ( 166) ( 72)

(LOSS)/ PROFIT FOR THE PERIOD ( 647) ( 226) 406 253



Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income


4

Reviewed Not Reviewed Reviewed Not Reviewed

OTHER COMPREHENSIVE INCOME Notes

1 January -

30 June 2016

1 April -

30 June 2016

1 January -

30 June 2015

1 April -

30 June 2015

Items That May Be Reclassified Subsequently To Profit or Loss 245 186 110 24

Currency Translation Adjustment 4 ( 4) ( 26) ( 5)

Fair Value Gains on Hedging Instruments Entered into for

Cash Flow Hedges 300 233 166 42

Fair Value Gains /(Losses) Hedging Instruments of Investment Accounted by

Using the Equity Method Entered into for Cash Flow Hedges 1 4 4 ( 6)

Income Tax Relating Items That May Be Reclassified

Subsequently to Profit or Loss ( 60) ( 47) ( 34) ( 7)

Items That Will Not Be Reclassified

Subsequently To Profit or Loss 2 2 - -

Actuarial Gains on Retirement Pay Obligation 3 3 - -

Income Tax Relating Items That Will Not Be

Reclassified Subsequently to Profit or Loss ( 1) ( 1) - -

247 188 110 24

( 400) ( 38) 516 277

Basic (Loss) Earning Per Share (Full US Cents) 28 ( 0.47) ( 0.16) 0.29 0.18

Diluted (Loss) Earning Per Share (Full US Cents) 28 ( 0.47) ( 0.16) 0.29 0.18

OTHER COMPREHENSIVE INCOME FOR THE PERIOD

TOTAL COMPREHENSIVE (EXPENSE) / INCOME FOR THE PERIOD



Condensed Consolidated Interim Statement of Changes in Equity


5

Items That Will Not Be

Reclassified

Subsequently To

Profit or Loss

Share Capital

Actuarial (Losses)

Retirement Pay

Obligation

Foreign

Currency

Translation

Differences

Fair Value Gains/

(Losses) on Hedging

Instruments Entered

Into For Cash Flow

Hedges

Restricted

Profit

Reserves

Previous

Years Profit

Net (Loss) for

The Period Total Equity

As of 31 December 2015 1,597 (8) (84) (327) 36 2,559 1,069 4,842

Transfers - - - - - 1,069 (1,069) -

Total comprehensive income - 2 4 241 - - (647) (400)

As of 30 June 2016 1,597 (6) (80) (86) 36 3,628 (647) 4,442

Items That May Be Reclassified

Subsequently To Profit or Loss Retained Earnings



Condensed Consolidated Interim Statement of Changes in Equity


6

Items That Will Not Be

Reclassified

Subsequently To

Profit or Loss

Share Capital

Actuarial (Losses)

Retirement Pay

Obligation

Foreign

Currency

Translation

Differences

Fair Value Gains/

(Losses) on Hedging

Instruments Entered

Into For Cash Flow

Hedges

Restricted

Profit

Reserves

Previous

Years Profit

Net Profit for

The Period Total Equity

As of 31 December 2014 1,597 (10) (47) (185) 36 1,714 845 3,950

Transfers - - - - - 845 (845) -

Total comprehensive income - - (26) 136 - - 406 516

As of 30 June 2015 1,597 (10) (73) (49) 36 2,559 406 4,466

Items That May Be Reclassified

Subsequently To Profit or Loss Retained Earnings



Condensed Consolidated Interim Statement of Cash Flows


7

Reviewed Reviewed

Notes

1 January-

30 June 2016

1 January-

30 June 2015(647) 406

Adjustments for Depreciation and Amortisation Expense 11 and 12 556 425

Adjustments for Provisions Related with Employee Benefits 16 25 22

Adjustments for (Reversal of) Provisions for Payables 14 (1) 3

Adjustments for Free Provisions for Probable Risks (2) -

Adjustments for Interest Income 24 and 25 (45) (13)

Adjustments for Interest Expense 25 92 79

Adjustments For Unrealised Foreign Exchange Losses / (Gains) 430 (350)

Adjustments for Manufacturers' Credits 1 3

Adjustments for Fair Value Losses / (Gains) on Derivative

Financial Instruments (47) 11

Adjustments for Undistributed Profits of Associates 3 2 (12)

Adjustments for Tax (Income) / Expenses 26 (172) 166

Adjustments for Losses / (Gains) Arised From Sale of

Tangible Assets 24 20 (1)

Adjustments for Losses / (Gains) Arised from Sale of

Other Non-Current Assets 14 -

226 739

Increase in Trade Receivables from Non-Related Parties (197) (99)

Decrease in Other Non-Related Party Receivables

Related with Operations 271 62

Adjustments for Increase in Inventories (15) (67)

Adjustments for Increase in Prepaid Expenses (122) (81)

Increase / (Decrease) in Trade Payables to Related Parties 3 (22)

Increase in Trade Payables to Non-Related Parties 52 42

Adjustments for Increase / (Decrease) in Payables Due to

Employee Benefits 25 (16)

Decrease in Other Operating Payables to

Non-Related Parties (10) (8)

Increase in Deferred Income 389 498

Decrease / (Increase) in Other Assets Related with Operations 3 (5)

Cash Flows From (Used in) Operations 625 1,043

Payments for Provisions Related with Employee Benefits 16 (7) (5)

Income taxes refund (paid) 26 1 2

619 1,040

Cash Receipts Proceed from sales of property, plant and equipment 1 22

Cash Payments From Purchasing of property, plant and equipment 11 and 12 (654) (362)

Cash Payments From Purchasing of Other Long-Term Assets (35) (143)

Other Cash Advances and Loans 512 121

Dividends Received 23 28

Interest Received 32 11

( 121) ( 323)

Proceeds from Loans 127 -

Payments of finance lease liabilities ( 413) (283)

Interest Paid ( 61) (68)

Other Outflows of Cash (9) (13)

( 356) ( 364)

142 353

900 635

5 1,042 988

Net Cash Flows From Investing Activities

Profit (loss)

Adjustments to Reconcile Profit (Loss)

Net Cash From (Used in) Operating Activities

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

Changes in Working Capital

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Net Cash Flows From Financing Activities

Net Change in Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS

AT THE BEGINNING OF THE PERIOD

CASH AND CASH EQUIVALENTS

AT THE END OF THE PERIOD

(*) USD 1,905 portion of property and equipment and intangible assets purchases in total of USD 2,559 for the period ended 30 June

2016 was financed through finance leases. (30 June 2015: USD 1,503 portion of property and equipment and intangible assets

purchases in total of USD 1,865 was financed through finance leases.)



Notes to the Condensed Consolidated Interim Financial Statements

As At And For the Six-Month Period Ended 30 June 2016 (All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

8

1. COMPANY ORGANIZATION AND ITS OPERATIONS

Türk Hava Yolları Anonim Ortaklığı (the “Company” or “THY”) was incorporated in Turkey in 1933.

As of 30 June 2016 and 31 December 2015, the shareholders and their respective shareholdings in the

Company are as follows:

30 June 2016 31 December 2015

Republic of Turkey Prime Ministry Privatization

Administration% 49.12 % 49.12

Other (publicly held) % 50.88 % 50.88

Total % 100.00 % 100.00

The number of employees working for the Company and its subsidiaries (together the “Group”) as of 30

June 2016 are 30,081 (31 December 2015: 27,676). The average number of employees working for the

Group for the period ended 30 June 2016 and 2015 are 29,024 and 25,365 respectively. The Company is

registered in İstanbul, Turkey and its head office address is as follows:

Türk Hava Yolları A.O. Genel Yönetim Binası, Atatürk Havalimanı, 34149 Yeşilköy İSTANBUL.

The Company’s stocks have been traded on Borsa İstanbul (BIST) since 1990.

Subsidiaries and Joint Ventures

The table below sets out the consolidated subsidiaries of the Group as of 30 June 2016 and 31 December

2015:

Country of

Name of the Company Principal Activity 30 June 2016 31 December 2015 Registration

THY Teknik A.Ş.

(THY Teknik) (*)Aircraft Maintenance

Services 100% 100% Turkey

THY Aydın Çıldır

Havalimanı İşletme A.Ş.

(THY Aydın Çıldır)Training & Airport

Operations 100% 100% Turkey

Ownership Rate

(*) In the Extraordinary General Assembly Meeting of THY Teknik A.Ş. dated 22 May 2015, it was decided to

merge with THY Habom A.Ş. The merge was carried out under legal structure of THY Teknik A.Ş. by

transferring all assets, liabilities, rights and obligations. The merge was registered and published on at 10 June

2015.




9

1. COMPANY ORGANIZATION AND ITS OPERATIONS (cont’d)

Subsidiaries and Joint Ventures (cont’d)

The table below sets out joint ventures of the Company as of 30 June 2016 and 31 December 2015:

Country of

Company Name

Registration and

Operations

Ownership

Share

Voting

Power Principal Activity

Güneş Ekspres Havacılık A.Ş.

(Sun Express) Turkey 50% 50%

Aircraft

Transportation

THY DO&CO İkram Hizmetleri A.Ş.

(Turkish DO&CO)Turkey 50% 50%

Catering

Services

P&W T.T. Uçak Bakım Merkezi Ltd. Şti. (TEC) Turkey 49% 49%Maintenance

Services

TGS Yer Hizmetleri A.Ş. (TGS) Turkey 50% 50% Ground Services

THY OPET Havacılık Yakıtları A.Ş. (THY Opet) Turkey 50% 50%

Aviation Fuel

Services

Goodrich Thy Teknik Servis Merkezi

Ltd. Şti. (Goodrich) Turkey 40% 40%

Maintenance

Services

Uçak Koltuk Sanayi ve Ticaret A.Ş

(Uçak Koltuk) Turkey 50% 50%

Cabin Interior

Products

TCI Kabin İçi Sistemleri San ve Tic. A.Ş. (TCI) Turkey 50% 50%Cabin Interior

Products

Türkbine Teknik Gaz Türbinleri Bakım Onarım A.Ş.

(Türkbine Teknik) Turkey 50% 50%

Maintenance

Services

Vergi İade Aracılık A.Ş. Turkey 30% 30%

VAT Return and

Consultancy

The Group owns 49%, 40% and 30% equity shares of TEC, Goodrich and Vergi İade Aracılık A.Ş.

respectively. However, based on the contractual arrangements between the Group and the other

respective investors, decisions about the relevant activities of the arrangements require both the Group

and the other respective investor agreement. Thus, the Group concluded that it has joint control over

TEC, Goodrich and Vergi İade Aracılık A.Ş..

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

2.1 Basis of Presentation

Statement of Compliance

The condensed consolidated interim financial statements have been prepared in accordance with

International Financial Reporting Standards (IFRS) as issued by International Accounting Standards

Board (IASB).

The condensed consolidated interim financial statements as at and for the six-month period ended 30

June 2016 have been prepared in accordance with IAS 34 “Interim Financial Reporting”. They do not

include all of the information required for complete annual financial statements and should be read in

conjunction with the consolidated financial statements of the Group as at and for the year ended 31

December 2015.




10

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (cont’d)

2.1 Basis of Presentation (cont’d)

Statement of Compliance (cont’d)

Board of Directors has approved the condensed consolidated interim financial statements as of 30 June

2016 on 19 August 2016. General Assembly and the related regulatory bodies have the authority to

modify the financial statements.

Basis of Preparation

The condensed consolidated interim financial statements, except for investment property and derivative

financial instruments, have been prepared on the historical cost basis. Historical cost is generally based

on the fair value of the consideration given in exchange for goods or services.

Adjustment of Financial Statements in Hyperinflationary Periods

As of 1 January 2005, “IAS 29: Financial Reporting in Hyperinflationary Economies” was no longer

applied henceforward.

Functional and Reporting Currency

Functional currency

The condensed consolidated interim financial statements of the Group are presented in US Dollars,

which is the presentation currency of the Company.

Although the currency of the country in which the Company is domiciled is Turkish Lira (TL), the

Company’s functional currency is determined as US Dollar. US Dollar is used to a significant extent in,

and has a significant impact on the operations of the Company and reflects the economic substance of

the underlying events and circumstances relevant to the Company. Therefore, the Company uses the US

Dollar in measuring items in its financial statements and as the reporting currency. All currencies other

than the currency selected for measuring items in the consolidated financial statements are treated as

foreign currencies. Accordingly, transactions and balances not already measured in US Dollar have been

premeasured in US Dollar in accordance with the relevant provisions of IAS 21 (the Effects of Changes

in Foreign Exchange Rates).

Except where otherwise indicated, all values are rounded the nearest million (US Dollar 000,000).

Basis of Consolidation

a. The condensed consolidated interim financial statements include the accounts of the parent company,

THY, its Subsidiaries and its Joint Ventures on the basis set out in sections (b) below. Financial

statements of the subsidiaries and affiliates are adjusted where applicable in order to apply the same

accounting policies. All transactions, balances, profit and loss within the Group are eliminated

during consolidation.




11


2.1 Basis of Presentation (cont’d)

Basis of Consolidation (cont’d)

b. The Group has ten joint ventures (Note: 1). These joint ventures are economical activities whereby

decisions about strategic finance and operating policy are jointly made by the consensus of the

Group and other investors. The affiliates are controlled by the Group jointly, and are accounted for

by.using.the.equity.method. Under the equity method, joint ventures are initially recognized at cost

and adjusted to recognize any distributions received impairments in the joint ventures and the

Company’s share of the profit or loss after the date of acquisition. Joint ventures’ losses that exceed

the Group’s share are not recognized, unless the Company has incurred legal or constructive

obligations on behalf of the joint venture.

Business Combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which

is the date on which control is transferred to the Group. Control occurs when the investor is exposed, or

has rights, to variable returns from its involvement with the investee and has the ability to affect those

returns through its power over the investee. In assessing control, the Group takes into consideration

potential voting rights that currently are exercisable.

The Group measures goodwill at the acquisition date as:

- the fair value of the consideration transferred; plus

- the recognized amount of any non-controlling interests in the acquire; plus

- if the business combination is achieved in stages, the fair value of the pre-existing equity interest in

the acquire; less

- the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities

assumed.

When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing

relationships. Such amounts generally are recognized in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group

incurs in connection with a business combination are expensed as incurred.

2.2 Changes and Errors in Accounting Estimates

The significant estimates and assumptions used in preparation of these condensed consolidated interim

financial statements as at 30 June 2016 are same with those used in the preparation of the Group’s

consolidated financial statements as at and for the year ended 31 December 2015.

2.3 Summary of Significant Accounting Policies

The accounting policies used in preparation of condensed consolidated interim financial statements as at

30 June 2016 are consistent with those used in the preparation of consolidated statements for the year

ended 31 December 2015.




12


2.4 New and Revised Standards and Interpretations

Standards issued but not yet effective and not early adopted

Standards, interpretations and amendments to existing standards that are issued but not yet effective up

to the date of issuance of the consolidated financial statements are as follows. The Group will make the

necessary changes if not indicated otherwise, which will be affecting the consolidated financial

statements and disclosures, after the new standards and interpretations become in effect.

IFRS 9 - Financial Instruments – Classification and measurement

As amended in December 2012, the new standard is effective for annual periods beginning on or after 1

January 2018. Phase 1 of this new IFRS 9 introduces new requirements for classifying and measuring

financial assets and liabilities. The amendments made to IFRS 9 will mainly affect the classification and

measurement of financial assets and measurement of fair value option (FVO) liabilities and requires that

the change in fair value of a FVO financial liability attributable to credit risk is presented under other

comprehensive income. Early adoption is permitted. The Group is in the process of assessing the impact

of the standard on financial position or performance of the Group.

IFRS 9 Financial Instruments – Hedge Accounting and amendments to TFRS 9, TFRS 7 and TAS 39 -

IFRS 9 (2013)

In November 2013, the IASB issued a new version of IFRS 9, which includes the new hedge accounting

requirements and some related amendments to IAS 39 and IFRS 7. Entities may make an accounting

policy choice to continue to apply the hedge accounting requirements of IAS 39 for all of their hedging

transactions. Further, the new standard removes the 1 January 2015 effective date of IFRS 9. The new

version of IFRS 9 issued after IFRS 9 (2013) introduces the mandatory effective date of 1 January 2018

for IFRS 9, with early adoption permitted. The Group is in the process of assessing the impact of the

standard on financial position or performance of the Group.

IFRS 9 Financial Instruments (2014)

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments

Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement

of financial instruments including a new expected credit loss model for calculating impairment on

financial assets, and the new general hedge accounting requirements. It also carries forward the

guidance on recognition and de-recognition of financial instruments from IAS 39. IFRS 9 is effective

for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. The

Group is in the process of assessing the impact of the standard on financial position or performance of

the Group.

IFRS 15 Revenue from Contracts with Customers

The standard is the result of a joint project and IASB and FASB which replaces existing IFRS and US

GAAP guidance and introduces a new control-based revenue recognition model for contracts with

customers. In the new standard, total consideration measured will be the amount to which the Company

expects to be entitled, rather than fair value and new guidance have been introduced on separating goods

and services in a contract and recognizing revenue over time. The standard is effective for annual

periods beginning on or after 1 January 2018, with early adoption permitted under IFRS. The Group is

in the process of assessing the impact of the amendment on financial position or performance of the

Group.




13


2.4 New and Revised Standards and Interpretations (cont’d)

Standards issued but not yet effective and not early adopted (cont’d)

IFRS 16 Leases

On 13 January 2016, IASB published the new leasing standard which will replace IAS 17 Leases, IFRIC

4 Determining Whether an Arrangement Contains a Lease, SIC 15 Operating Leases – Incentives, and

SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease and consequently

change IAS 40 Investment Properties. IFRS 16 eliminates the current dual accounting model for lessees,

which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases.

Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease

accounting. Lessor accounting remains similar to current practice. The standard is effective for annual

periods beginning on or after 1 January 2019, with early adoption permitted provided that an entity also

adopts IFRS 15-Revenue from Contracts with Customers. The Group is in the process of assessing the

impact of the amendment on financial position or performance of the Group.

Amendments to IAS 7 – Disclosure Initiative

IAS 7 Statement of Cash Flows has been amended as part of the IASB’s broader disclosure initiative to

improve presentation and disclosure in financial statements. The amendments will require disclosures

that enable users of financial statements to evaluate changes in liabilities arising from financing

activities, including both changes arising from cash flow and non-cash changes. The amendments are

effective for periods beginning on or after 1 January 2017, with earlier application permitted. The Group

is in the process of assessing the impact of the amendment on financial position or performance of the

Group.

Amendments to IAS 12 – Recognition of Deferred Tax Assets for Unrealized Losses

The amendments clarify that the existence of a deductible temporary difference depends solely on a

comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is

not affected by possible future changes in the carrying amount or expected manner of recovery of the

asset. The amendments are effective for annual periods beginning on or after 1 January 2017. The

Group is in the process of assessing the impact of the amendment on financial position or performance

of the Group.

Amendments to IFRS 2 – Classification and Measurement of Share-based Payment Transactions

IFRS 2 Share-Based Payment has been amended by IASB to improving consistency and resolve some

long-standing ambiguities in share-based payment accounting. The amendments cover three accounting

areas: i) measurement of cash-settled share-based payments, ii) classification of share-based payments

settled net of tax withholdings; and iii) accounting for modification of a share-based payment from

cash-settled to equity-settled. Also, same approach has been adopted for the measurement of cash-

settled share-based payments as equity-settled share-based payments. If certain conditions are met,

share-based payments settled net of tax withholdings are accounted for as equity-settled share-based

payments. The amendments are effective for periods beginning on or after 1 January 2018, with earlier

application permitted. The Group is in the process of assessing the impact of the amendment on

financial position or performance of the Group.




14


2.5 Determination of Fair Values

Various accounting policies and explanations of the Group necessitate to determinate the fair value of

both financial and non-financial assets and liabilities. If applicable, additional information about

assumptions used for determination of fair value are presented in notes particular to assets and

liabilities.

Evaluation methods in terms of levels are described as follows:

Level 1: Quoted (unadjusted) prices in active markets for identical assets and obligations.

Level 2: Variables obtained directly (via prices) or indirectly (by deriving from prices) which are

observable for similar assets and liabilities other than quoted prices mentioned in Level 1.

Level 3: Variables which are not related to observable market variable for assets and liabilities

(unobservable variables).

3. INVESTMENTS ACCOUNTED BY USING THE EQUITY METHOD

The joint ventures accounted for using the equity method are as follows:


Sun Express 64 90

Turkish DO&CO 62 54

TGS 38 40

TEC 32 26

THY Opet 23 28

TCI 4 3

Turkbine Teknik 2 2

Uçak Koltuk 2 2

Goodrich 1 1

Vergi İade Aracılık (*) - -

228 246

(*) The Group’s share in its shareholders’ equity is less than USD 1.

Financial information for Sun Express as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 1,072 813

Total liabilities 943 633

Shareholders'equity 129 180Group's share in joint

venture's shareholders'

equity64 90




15

3. INVESTMENTS ACCOUNTED BY USING THE EQUITY METHOD (cont’d)

Financial information for Sun Express as of 30 June 2016 and 2015 are as follows (cont’d):

1 January - 1 April - 1 January - 1 April -

30 June 2016 30 June 2016 30 June 2015 30 June 2015

Revenue 432 266 487 321

(Loss) / profit for the

period(53) 9 (15) 14

Group's share in joint

venture's (loss) /profit

for the period(28) 3 (8) 7

Financial information for Turkish DO&CO as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 203 174




equity62 54



Revenue 181 94 186 99

Profit for the period 18 10 18 9Group's share in joint

venture's profit

for the period9 5 9 5

Financial information for TGS as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015





equity38 40



Revenue 134 72 120 63


venture's profit





16


Financial information for THY Opet as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015





equity23 28



Revenue 611 324 941 527


venture's profit


Financial information for TEC as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015





equity32 26



Revenue 157 88 111 53


venture's profit


Financial information for Turkbine Teknik as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 4 5

Total liabilities - -



equity2 2




17


Financial information for Turkbine Teknik as of 30 June 2016 and 2015 are as follows (cont’d):



Revenue - - 1 -

Profit for the period - - - -Group's share in joint

venture's profit

for the period- - - -

Financial information for TCI as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 13 11




equity4 3



Revenue 5 2 2 1

(Loss) for the period (1) - (2) -Group's share in joint

venture's (loss)

for the period- - (1) -

Financial information for Uçak Koltuk as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 16 17




equity2 2



Revenue 4 3 3 2

(Loss) for the period (1) 1 (1) -Group's share in joint

venture's (loss)

for the period- 1 - -




18


Financial information for Goodrich as of 30 June 2016 and 2015 are as follows:

30 June

2016

31 December

2015

Total assets 5 4




equity1 1



Revenue 5 3 4 3

Profit for the period 1 1 - -Group's share in joint

venture's profit

for the period- - - -

Share of investments’ profit / (loss) accounted by using the equity method are as follows:



Sun Express (28) 3 (8) 7

Turkish DO&CO 9 5 9 5

TGS 5 3 5 4

THY Opet 7 7 4 8

TEC 5 3 3 1

TCI - - (1) -

Uçak Koltuk - 1 - -

(2) 22 12 25

4. SEGMENTAL REPORTING

Group management makes decisions regarding resource allocation to segments based upon the results

and the activities of its air transport and aircraft technical maintenance services segments for the

purpose of segments’ performance evaluation. The Group’s main activities can be summarized as

follows:

Air Transport (“Aviation”)

The Group’s aviation activities consist of mainly domestic and international passenger and cargo air

transportation.

Technical Maintenance Services (“Technical”)

The Group’s technical activities consist of mainly aircraft repair and maintenance services and

providing technical and infrastructure support related to aviation sector.

The detailed information about the sales revenue of the Group is given in Note 20.




19

4. SEGMENTAL REPORTING (cont’d)

4.1 Total Assets and Liabilities

Total Assets 30 June 2016 31 December 2015

Aviation 17,942 16,200

Technical 1,197 1,198

Total 19,139 17,398

Less: Eliminations due to consolidation (1,024) (1,015)

Total assets in consolidated

financial statements 18,115 16,383

Total Liabilitites 30 June 2016 31 December 2015

Aviation 13,581 11,438

Technical 445 508

Total 14,026 11,946

Less: Eliminations due to consolidation (353) (405)

Total liabilitites in consolidated

financial statements 13,673 11,541

4.2 Profit / (Loss) before Tax

Segment Results:

1 January - 30 June 2016 Aviation Technic

Inter-segment

elimination Total

Sales to External Customers 4,555 77 - 4,632

Inter-Segment Sales 18 433 (451) -

Revenue 4,573 510 (451) 4,632

Cost of Sales (-) (4,362) (380) 452 (4,290)

Gross Profit 211 130 1 342

Administrative Expenses (-) (114) (54) 3 (165)

Marketing and Sales Expenses (-) (661) (2) - (663)

Other Operating Income 76 18 (13) 81

Other Operating Expenses (-) (6) (9) 9 (6)

Operating (Loss) Before Investment

Activities (494) 83 - (411)

Income from Investment Activities 56 - - 56

Expenses from Investment Activities (20) - - (20)

Share of Investments' (Loss) Accounted

by Using The Equity Method (7) 5 - (2)

Operating (Loss) (465) 88 - (377)

Financial Income 81 - (6) 75

Financial Expense (-) (519) (4) 6 (517)

(Loss) Before Tax (903) 84 - (819)




20

4. SEGMENTAL REPORTING (cont’d)

4.2 Profit / (Loss) before Tax (cont’d)

Segment Results:


Inter-segment

elimination Total

Sales to External Customers 4,708 81 - 4,789

Inter-Segment Sales 20 351 (371) -

Revenue 4,728 432 (371) 4,789

Cost of Sales (-) (4,067) (339) 371 (4,035)

Gross Profit 661 93 - 754

Administrative Expenses (-) (89) (49) 3 (135)

Marketing and Sales Expenses (-) (566) (3) - (569)

Other Operating Income 177 11 (30) 158

Other Operating Expenses (-) (31) (12) 27 (16)

Operating Profit Before Investment

Activities 152 40 - 192

Income from Investment Activities 34 - - 34

Expenses from Investment Activities - - - -

Share of Investments' Profit Accounted

by Using The Equity Method 9 3 - 12

Operating Profit 195 43 - 238

Financial Income 442 7 (6) 443

Financial Expense (-) (109) (6) 6 (109)

Profit Before Tax 528 44 - 572

4.3 Investment Operations


Inter-segment

elimination Total

Purchase of property and equipment

and intangible assets 2,474 85 - 2,559

Current period depreciation

and amortization change 496 60 - 556

Investments accounted

by using the equity method 191 37 - 228


Inter-segment

elimination Total

Purchase of property and equipment

and intangible assets 1,791 74 - 1,865

Current period depreciation

and amortization change 375 50 - 425

Investments accounted

by using the equity method 160 30 - 190




21

5. CASH AND CASH EQUIVALENTS


Cash 3 2

Banks – Time deposits 901 823

Banks – Demand deposits 135 69

Other liquid assets 3 6

1,042 900

Details of the time deposits as of 30 June 2016 are as follows:

Amount Currency Interest Rate Maturity 30 June 2016

September 2016

July 2016

September 2016

901

1,009 TL 8.70% - 10.97% 352

149 USD 1.00% - 2.13% 150

360 EUR 1.03% - 1.52% 399

Details of the time deposits as of 31 December 2015 are as follows:

Amount Currency Interest Rate Maturity 31 December 2015

March 2016

January 2016

March 2016

823

625571 EUR 1.27% - 1.56%

498 TL 172

26 USD 26

9.32% - 11.87%

1.64% - 1.72%

6. FINANCIAL INVESTMENTS

Short-term financial investments are as follows:


Time deposits with maturity more than 3 months 66 62

Time deposit with maturity of more than 3 months as of 30 June 2016 is as follows:


66TL 9.87% - 9.99% October 2016190

Time deposit with maturity of more than 3 months as of 31 December 2015 is as follows:


56 EUR 1.35% - 1.48% April 2016 62




22

6. FINANCIAL INVESTMENTS (cont’d)

Long-term financial investments are as follows:


Debt to securities/held to maturity

- Eurobonds 31 -

Other 1 1

32 1

Details of Eurobonds as of 30 June 2016 is as follows:


31 USD 4.75% - 6.88% June 2019 - February 2025 31

Other long-term financial investments are as follows:


Sita Inc. 1 1

Star Alliance Gmbh < 1 < 1

Emek İnşaat ve İşletme A.Ş. < 1 < 1

UATP Inc. < 1 < 1

1 1

Long-term financial investments are accounted at cost since they are not traded in an active market.

Details of the long-term financial investments of the Group at 30 June 2016 are as follows:

Country of

Company Name

Registration and

Operations

Ownership

Share

Voting

Power Principal Activity

UATP Inc. USA4% 4%

Payment Intermediation Between

Passengers and Airlines

Star Alliance Gmbh Germany 5.55% 5.55% Coordination Between Star

Alliance Member Airlines

Sita Inc. NetherlandsLess than

0.1%

Less than

0.1%

Information & Telecommunication

Services

Emek İnşaat ve

İşletme A.Ş.Turkey 0.3% 0.3% Construction




23

7. BORROWINGS

Short term borrowings are as follows:


Short term borrowings 250 250

Short term borrowings as of 30 June 2016 is as follows:


250 USD 0.94% September 2016 250

Short term borrowings as of 31 December 2015 is as follows:


250 USD 0.69% March 2016 250

Short term portions of long term borrowings are as follows:


Finance lease obligations (Note: 13) 943 763

Bank borrowings 13 -

956 763

Long term borrowings are as follows:


Finance lease obligations (Note: 13) 8,427 6,636

Bank borrowings 114 -

8,541 6,636

Details of bank borrowings as of 30 June 2016 is as follows:


Less than 1 year 13 -

Between 1 – 5 years 107 -

Over 5 years 7 -

127 -

Cost of the bank borrowings 5.5 year term denominated in 115 million EURO is bearing annual interest

rate of Euribor + 2.45%.




24

8. OTHER FINANCIAL LIABILITIES

Short-term other financial liabilities of the Group are as follows:


Other financial liabilities 6 15

Other financial liabilities consist of overnight interest-free borrowings from banks obtained for

settlement of monthly tax and social security premium payments.

9. RELATED PARTY TRANSACTIONS

Other short-term receivables from related parties are as follows:


Turkish DO&CO (*) 3 3

(*) The amounts are dividend receivables of 2015.

Short-term trade payables to related parties that are accounted by using the equity method are as

follows:


THY Opet 52 54

Turkish DO&CO 32 28

TEC 21 19

Sun Express 16 19

TGS 14 11

Goodrich - 1

135 132

Transactions with related parties for the period ended 30 June 2016 and 2015 are as follows:

a) Sales to related parties:



Sun Express 15 7 19 8

TEC 9 4 11 7

TGS 2 1 3 2

Sun Express

Deutschland 2 1 - -


29 14 34 18




25

9. RELATED PARTY TRANSACTIONS (cont’d)

Transactions with related parties for the period ended 30 June 2016 and 2015 are as follows (cont’d):

b) Purchases from related parties:



THY Opet 528 283 774 425


TEC 130 80 73 28

TGS 128 68 105 55

Sun Express 120 63 123 66

Goodrich 3 2 2 1

Sita Inc 1 1 - -

1,078 584 1,242 660

Transactions between the Group and THY Opet are related to the supply of aircraft fuel; transactions

between the Group and Turkish DO&CO are related to catering services; transactions between the

Group and Sun Express are related to wet lease and seat sales operations; transactions between the

Group and TGS are related to ground services and transactions between the Group and TEC are related

to engine maintenance services. Receivables from related parties are not collateralized and maturity of

trade receivables is 30 days.

The total amount of salaries and other short term benefits provided for the Board Members, General

Manager and Deputy General Managers are USD 2 (1 January-30 June 2015: USD 2).

10. OTHER RECEIVABLES

Other short-term receivables from non-related parties as of 30 June 2016 and 31 December 2015 are as

follows:


Predelivery payments made for aircrafts 819 1,139

Receivables from technical purchases 115 133

Bank deposits with transfer limitations (*) 66 59

Value added tax receivables 52 38

Receivables from pilots for flight training 11 11

Receivables from employees 1 1

Other receivables 2 1

1,066 1,382

(*) As of 30 June 2016, the balance of this account includes bank deposits in Morocco, Ethiopia, Ghana,

Bangladesh, Sudan, Egypt, Argentina, Algeria, Greece, Nigeria, Ukraine, Senegal, Niger, Mali, Republic of Cote

D’ivoire, Burkina Faso, Eritrea, Mozambique and Benin.




26

10. OTHER RECEIVABLES (cont’d)

Other long-term receivables from non-related parties as of 30 June 2016 and 31 December 2015 are as

follows:


Predelivery payments made for aircrafts 211 392

Receivables related to investment certificates 211 172

Interest and commodity swap agreement deposits 92 418

Receivables from pilots for flight training 69 58

Deposits and guarentees given 15 12

Bank deposits with transfer limitations (*) 6 5

Other receivables - 1

604 1,058

(*) As of 30 June 2016, the balance of this account includes bank deposits in Syria.




27

11. PROPERTY AND EQUIPMENT

Cost

Opening balance at 1 January 2016 216 318 169 13,926 546 488 472 152 16,287

Additions - 17 14 2,179 43 72 15 216 2,556

Transfer (*) - - 1 29 32 - (5) (58) (1)

Disposals - (1) (12) (393) (26) (34) - - (466)

Closing balance at 30 June 2016 216 334 172 15,741 595 526 482 310 18,376

Accumulated Depreciation

Opening balance at 1 January 2016 56 146 104 4,100 195 172 99 - 4,872

Depreciation charge 5 15 12 438 21 36 18 - 545

Disposals - (1) (12) (373) (25) (20) - - (431)

Closing balance at 30 June 2016 61 160 104 4,165 191 188 117 - 4,986

Net book value 30 June 2016 155 174 68 11,576 404 338 365 310 13,390

Net book value 31 December 2015 160 172 65 9,826 351 316 373 152 11,415

Land, Land

improvements

and buildings

Technical

equipments

simulators

and vehicles

Other

equipments,

and fixtures Aircrafts

Spare

engines

Components

and

repairable

spare parts

Leasehold

improvements

Construction

in progress Total

(*) Tangible assets amounting to USD 1 are transferred to intangible assets.

As at 30 June 2016, carrying value of the aircrafts and spare engines acquired through finance leases is USD 11,267 (31 December 2015: USD 9,432)




28

11. PROPERTY AND EQUIPMENT (cont’d)

Cost

Opening balance at 1 January 2015 164 284 144 11,301 459 346 446 111 13,255

Additions 3 7 9 1,659 49 57 8 66 1,858

Transfers 6 - 1 37 - - - (44) -

Disposals - (2) (2) (3) - (20) - - (27)

Closing balance at 30 June 2015 173 289 152 12,994 508 383 454 133 15,086

Accumulated Depreciation

Opening balance at 1 January 2015 47 125 90 3,430 163 132 67 - 4,054

Depreciation charge 4 11 10 331 15 29 15 - 415

Disposals - (2) (1) (3) - (1) - - (7)

Closing balance at 30 June 2015 51 134 99 3,758 178 160 82 - 4,462

Net book value 30 June 2015 122 155 53 9,236 330 223 372 133 10,624

Components

and

repairable

spare parts

Leasehold

improvements

Construction

in progress Total

Land

improvements

and buildings

Technical

equipments

simulators

and vehicles

Other

equipments,

and fixtures Aircrafts

Spare

engines

As of 30 June 2015, carrying value of the aircrafts and spare engines acquired through finance leases is USD 8,799.




29

12. OTHER INTANGIBLE ASSETS

Cost

Opening balance at 1 January 2016 44 137 5 186

Additions - 3 - 3

Disposals - (2) - (2)

Transfers - 1 - 1

Closing balance at 30 June 2016 44 139 5 188

Accumulated Amortization

Opening balance at 1 January 2016 - 96 1 97

Amortization charge - 11 - 11


Closing balance at 30 June 2016 - 105 1 106

Net book value at 30 June 2016 44 34 4 82Net book value at 31 December 2015 44 41 4 89

Slot Rights

and Acquired

Technical

Licenses

Other

Rights

Other

Intangible

Assets Total

Cost

Opening balance at 1 January 2015 23 121 5 149

Additions - 7 - 7


Closing balance at 30 June 2015 23 126 5 154

Accumulated Amortization

Opening balance at 1 January 2015 - 77 1 78

Amortization charge - 10 - 10


Closing balance at 30 June 2015 - 86 1 87

Net book value at 30 June 2015 23 40 4 67

Slot Rights

and Acquired

Technical

Licenses

Other

Rights Total

Other

Intangible

Assets

The Group considers slot rights and licenses obtained by purchase of MNG Teknik and included in

other rights above amounting to USD 10 at cost as intangible assets having indefinite useful lives since

they do not have expiry dates and usable in the foreseeable future.




30

13. LEASING TRANSACTIONS

Maturities of finance lease obligations are as follows:


Less than 1 year 1,093 896

Between 1 – 5 years 4,281 3,419

Over 5 years 4,995 3,898

10,369 8,213

Less: Future interest expenses (999) (814)

9,370 7,399


Interest Range:

Floating rate obligations 5,215 4,038

Fixed rate obligations 4,155 3,361

9,370 7,399

Principal value of future rentals stated

in financial statements

The Group leased certain of its aircrafts and spare engines under finance leases. The lease term is 10-

12 years. The Group has options to purchase related assets for an insignificant amount at the end of

lease terms. The Group’s obligations under finance leases are secured by the lessors’ title to the leased

asset.

As of 30 June 2016, the US Dollars, Euro, JPY and Swiss Franc denominated lease obligations’

weighted average interest rates are 2.81% ( 31 December 2015: 3.13%) for the fixed rate obligations

and 1.02% (31 December 2015: 1.06% ) for the floating rate obligations.

14. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES

Short-term provisions as of 30 June 2016 and 31 December 2015 are as follows:

Short-term provision for employee benefits is as follows:


Provisions for unused vacation 64 52

Changes in the provisions for the periods ended 30 June 2016 and 2015 are set out below:

1 January - 1 January -

30 June 2016 30 June 2015

Provisions at the beginning of the year 52 58

Provisions for the current period 12 9

Foreign currency translation differences - (8)

Provisions at the end of the period 64 59

The Group recognizes an obligation for unused vacation days based on salaries of employees at the

end of each reporting period.




31

14. PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (cont’d)

Other short-term provision is as follows:


Provisions for legal claims 13 15

Changes in the provisions for legal claims for the periods ended 30 June 2016 and 2015 are set out

below:


30 June 2016 30 June 2015


Provisions for the current period 2 5

Provisions released (3) (2)

Foreign currency translation differences (1) (3)

Provisions at the end of the period 13 16

The Group recognizes provisions for lawsuits against itself due to its operations. The law suits against

the Group are usually reemployment law suits by former employees or related to damaged luggage or

cargo. The estimates have been made on the basis of the legal advices. These amounts have not been

discounted since the effect is not material. It is expected that provision amount will be paid within one

year.




32

15. COMMITMENTS

a) Guarantees/Pledges/Mortgages (“GPM”) given by the Group: Amount of letter of guarantees given

as of 30 June 2016 is USD 595 (31 December 2015: USD 316).

Original

currency

amount

USD

equivalent

Original

currency

amount

USD

equivalent

A. Total amounts of GPM given on

the behalf of its own legal entity - 595 - 316

-Collaterals

TL 31 11 27 9

EUR 31 34 11 13

USD 546 546 291 291

Other - 4 - 3

B. Total amounts of GPM given on the

behalf of subsidiaries that are included in

full consolidation - - - -

C. Total amounts of GPM given in order

to guarantee third party debts for routine

trade operations - - - -

D. Total amounts of other GPM given - - - -

i. Total amount of GPM given on

behalf of the Parent - - - -

ii. Total amount of GPM given on

behalf of other group companies not

covered in B and C - - - -

iii. Total amount of GPM given on

behalf of third parties not covered in C - - - -

595 316

31 December 201530 June 2016

The ratio of other GPM (“D”) given by the group to its equity is 0% as of 30 June 2016 (31 December

2015: 0%)

b) Operational lease obligations: The breakdown of operational lease obligations related to aircrafts is

as follows:


Less than 1 year 324 286

Between 1 – 5 years 698 738

More than 5 years 339 176

1,361 1,200




33

15. COMMITMENTS (cont’d)

c) Other operational lease debts :

The Group has operational lease agreements for 15 years related to the land for the aircraft

maintenance hangar and building and another operational lease agreement for 23 years related to the

land for the aircraft maintenance hangar. The liabilities of the Group related to these lease agreements

are as follows:


Less than 1 year 5 5

Between 1 – 5 years 22 21

More than 5 years 33 37

60 63

d) Aircraft purchase commitments:

To be delivered between the years 2013-2021, the Group signed a contract for 259 aircrafts with a list

price value of 34.7 billion US Dollars (full). 2 of these aircrafts were delivered in 2013, 10 were

delivered in 2014, 33 were delivered in 2015 and 33 were delivered in the first six-month period of

2016. The Group has made an advance payment of 1 billion US Dollars (full) relevant to these

purchases as of 30 June 2016.

16. EMPLOYEE BENEFITS

Provisions for long-term retirement pay liability as of 30 June 2016 and 31 December 2015 is

comprised of the following:


Provisions for retirement pay liability 132 119

Provisions for retirement pay liability are recorded as follows:

Under Labor Law effective in Turkey, it is an obligation to make legal retirement pay to employees

whose employment is terminated in certain ways. Also, according to Article 60 of Social Security Law

numbered 506 which was revised by the laws 2422, dated 6 March 1981 and numbered 4447, dated 25

August 1999, it is an obligation to make legal retirement pay to those who entitled to receive

retirement pay when leaving their work. Some transfer provisions related to employment conditions

prior to retirement are removed from the Law by the revise made on 23 May 2002.

Retirement pay liability is subject to an upper limit of monthly US Dollar 1,485 (full) as of 30 June 2016.

Retirement pay liability is not subject to any funding legally. Provisions for retirement pay liability are

calculated by estimating the present value of probable liability that will arise due to retirement of

employees.




34

16. EMPLOYEE BENEFITS (cont’d)

IAS 19 (“Employee Benefits”) stipulates the progress of company’s liabilities by use of actuarial

valuation methods under defined benefit plans. Actuarial assumptions used in calculation of total

liabilities are described as follows:

The key assumption is that maximum liability amount increases in accordance with the inflation rate for

every service year. Provisions in the accompanying consolidated financial statements as of 30 June 2016

are calculated by estimating present value of liabilities due to retirement of employees. Provisions in the

relevant balance sheet dates are calculated with the assumptions of 7.00% annual inflation rate (31

December 2015: 7.00%) and 11.00% interest rate (31 December 2015: 11.00%). Estimated amount of

non-paid retirement pay retained in the Company due to voluntary leaves is assumed as 2.30% (31

December 2015: 2.40%). Ceiling for retirement pay is revised semi-annually. Ceiling amount of US

Dollar 1,485 (full) which is in effect since 30 June 2016 is used in the calculation of Group’s provision for

retirement pay liability.

Movement in the provisions for retirement pay liability is as follows:


30 June 2016 30 June 2015


Service charge for the period 16 13

Interest charges 2 2

Actuarial gains (3) -

Payments (7) (5)

Foreign currency translation difference 5 (18)Provisions at the end of the period 132 119




35

17. EXPENSES BY NATURE

Expenses by nature for the six-month period ended 30 June 2016 and 2015 are as follows:



Fuel expenses 1,276 672 1,476 791

Personnel expenses 973 480 820 408

Depreciation expenses 556 286 425 222

Ground services expenses 322 168 301 157

Aircraft maintenance expenses 309 166 207 112

Passenger services and catering expenses 292 150 283 146

Air traffic control expenses 249 128 238 126

Airport expenses 219 116 195 104

Commissions and incentives 177 92 175 96

Wet lease expenses 148 79 137 77

Advertisement and promotion expenses 138 85 86 49

Reservation systems expenses 128 64 119 60

Operating lease expenses 110 55 97 47

Service expenses 38 20 31 16

Rents 33 18 26 12

Insurance expenses 24 11 18 9

IT & communication expenses 22 11 18 8

Taxes and duties 19 7 16 10

Transportation expenses 14 7 14 8

Consultancy expenses 7 4 6 3

Utility expenses 4 2 6 2

Systems use and associateship expenses 4 2 4 2

Membership fees 3 2 2 1

Other expenses 53 25 39 20

5,118 2,650 4,739 2,486

18. DEFERRED INCOME

Deferred income is as follows:


Passenger flight liabilites 1,488 1,091

Other short-term deferred income 13 13

1,501 1,104

Passenger flight liability is as follows;


Flight liability generating from ticket sales 1,277 833

Flight liability generating from

Frequent flyer program 211 258

1,488 1,091




36

18. DEFERRED INCOME (cont’d)

Short-term deferred income is as follows:


Unearned bank protocol revenue accruals 6 7

Advances received 6 3

Other income accruals 1 3

13 13

Long-term deferred income is as follows:


Gross manufacturer’s credits 31 31Accumulated depreciation of manufacturer’s

credit (25) (23)

Unearned bank protocol revenue accruals 5 8

11 16

19. SHAREHOLDERS’ EQUITY

The ownership structure of the Group’s share capital is as follows:

Class %

30 June

2016 %

31 December

2015

Republic of Turkey Prime Ministry

Privatization Administration A, C 49.12 678 49.12 678

Other (publicly held) A 50.88 702 50.88 702

Paid-in capital (Turkish Lira) 1,380 1,380

Inflation adjustment on share capital

(Turkish Lira) (*) 1,124 1,124

Historic capital (Turkish Lira) (**) 2,504 2,504

Historic capital (USD Equivalent) (**) 1,597 1,597

(*) 1,644 (full) shares belonging to various private shareholders were not taken into consideration

when the Group was included to the privatization program in 1984. Subsequently, these shares were

registered on behalf of Privatization Administration according to Articles of Association of the Group,

approved by the decision of the Turkish Republic High Planning Board on 30 October 1990.

(**) Inflation adjustment on share capital represents indexation of historical capital payments based on

inflation indices until 31 December 2004.

(***) Historic capital amounts are represented in Millions of Turkish Lira.




37

19. SHAREHOLDERS’ EQUITY (cont’d)

As of 30 June 2016, the Group’s issued and paid-in share capital consists of 137,999,999,999 Class A

shares and 1 Class C share, all with a par value of Kr 1 each. These shares are registered. The Class C

share belongs to the Republic of Turkey Prime Ministry Privatization Administration and has the

following privileges:

Articles of Association 7: Positive vote of the board member representing class C share with Board’s

approval is necessary for transfer of shares issued to the name.

Articles of Association 10: The Board of Directors consists of nine members of which one member

has to be nominated by the class C shareholder and the rest eight members has to be elected by class

A shareholders.

Articles of Association 14: The following decisions of the Board are subject to the positive vote of the

class C Shareholder:

a) Decisions that will negatively affect the Company’s mission Defined in Article 3.1. of the Articles

of Association,

b) Suggesting change in the Articles of Association at General Assembly,

c) Increasing share capital,

d) Approval of transfer of the shares issued to the name and their registration to the “Share Registry”,

e) Every decision or action which directly or indirectly put the Company under commitment over 5%

of its total assets of the latest annual financial statements prepared for Capital Market Board. (This

sentence will expire when the Company’s shares held by Turkish State decrease under 20%.)

f) Decisions relating to merges and liquidation,

g) Decisions cancelling flight routes or significantly decreasing frequency of flight routes, not

including the ones that cannot even recover their operational expenses, subject to the market

conditions.

Restricted Profit Reserves

Turkish Commercial Code (TCC) stipulates that the general legal reserve is appropriated out of

statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the company’s

paid-in share capital. Additionally, not limited with 20% of paid-in share capital, the general legal

reserve is appropriated at the rate of 10% per annum of all cash dividends in excess of 5% of the paid-

in share capital. Under TCC, the legal reserves can only be used to offset losses, to sustain business

when conditions get worse, to prevent unemployment and are not available for any other usage unless

they exceed 50% of paid-in share capital.

Foreign Currency Translation Differences

Currency translation differences under equity arise from Group’s joint ventures accounted under

equity method which have functional currencies other than USD.




38

19. SHAREHOLDERS’ EQUITY (cont’d)

Distribution of Dividends

Listed companies distribute dividend in accordance with the Communiqué No. II-19.1 issued by the

CMB which is effective from 1 February 2014.

Companies distribute dividends in accordance with their dividend payment policies settled and

dividend payment decision taken in general assembly in accordance with relevant legislations. The

communiqué does not constitute a minimum dividend rate. Companies distribute dividend in

accordance with their dividend policy or articles of associations. In addition, dividend can be

distributed by fixed or variable installments and advance dividend can be paid in accordance with

profit on financial statements of the company.

Actuarial Differences on Defined Benefit Plans

As a result of the adoption of IAS 19 (2011), all actuarial differences are recognized immediately in

other comprehensive income.

Gains/Losses from Cash Flow Hedges

Hedge gain/losses against cash flow risk arise from the accounting of the changes in the fair values of

effective derivative financial instruments designated against financial risks of future cash flows under

equity. Total of deferred gain/loss arising from hedging against financial risk are accounted in profit or

loss when the hedged item impacts profit or loss.

20. REVENUE

Breakdown of gross profit is as follows:



Passenger revenue

Scheduled 4,055 2,130 4,208 2,273

Unscheduled 16 10 20 14

Total passenger revenue 4,071 2,140 4,228 2,287

Cargo revenue

Carried by passenger aircraft 288 159 273 144

Carried by cargo aircraft 176 94 192 97

Total cargo revenue 464 253 465 241

Total passenger and cargo revenue 4,535 2,393 4,693 2,528

Technical revenue 77 42 81 35

Other revenue 20 9 15 7

Net sales 4,632 2,444 4,789 2,570

Cost of sales (-) (4,290) (2,221) (4,035) (2,122)

Gross profit 342 223 754 448




39

20. REVENUE (cont’d)

Breakdown of total passenger and cargo revenue by geography is as follows:



- Europe 1,297 698 1,412 774

- Far East 1,024 534 1,099 579

- Middle East 561 279 598 315

- America 616 333 582 330

- Africa 432 215 380 191

Total international flights 3,930 2,059 4,071 2,189

Domestic flights 605 334 622 339Total passenger and cargo revenue 4,535 2,393 4,693 2,528

21. COST OF SALES

Breakdown of the cost of sales is as follows:



Fuel expenses 1,276 672 1,476 791



Ground services expenses 322 168 301 157

Aircraft maintenance expenses 309 166 207 112

Passenger services and catering expenses 292 150 283 146

Air traffic control expenses 249 128 238 126

Airport expenses 219 116 195 104

Wet lease expenses 148 79 137 77

Operating lease expenses 110 55 97 47

Insurance expenses 24 11 18 9


Rents 17 9 12 6

Transportation expenses 14 7 14 8



IT & communication expenses 1 - - (1)

Other expenses 15 8 11 5

4,290 2,221 4,035 2,122




40

22. GENERAL ADMINISTRATIVE EXPENSES AND MARKETING AND SALES EXPENSES

Breakdown of general administrative expenses is as follows:







Rents 6 4 5 2

Systems use and associateship expenses 4 2 4 2



Other general administrative expenses 10 5 7 3

165 83 135 62

22. GENERAL ADMINISTRATIVE EXPENSES AND MARKETING AND SALES EXPENSES

(cont’d)

Breakdown of marketing and sales expenses is as follows:



Commissions and incentives 177 92 175 96


Advertisement and promotion expenses 138 85 86 49

Reservation systems expenses 128 64 119 60


Rents 10 5 9 4





Membership fees 3 2 2 1

Other marketing and sales expenses 28 12 21 12

663 346 569 302




41

23. OTHER OPERATING INCOME / EXPENSES

Breakdown of other operating income is as follows:



Manufacturers' credits 35 19 34 15

Insurance, indemnities, penalties income 17 7 11 6

Foreign exchange gains from operational

activities, net 11 (24) 94 66

Provisions released 6 2 6 3

Non- interest income from banks 4 2 3 2

Turnover premium from suppliers 3 2 3 2

Rent income 1 - 1 -

Rediscount interest income - - - 1

Other operating income 4 - 6 4

81 8 158 99

Breakdown of other operating expenses is as follows:



Provisions 4 1 8 6

Indemnity and penalty expenses 2 1 2 1

Rediscount interest expenses - 1 - -

Other operating expenses - (4) 6 2

6 (1) 16 9

24. INCOME AND EXPENSES FROM INVESTMENT ACTIVITIES

Breakdown of income from investment activities is as follows:



Income from investment incentives 39 21 30 19

Interest income from financial investment 17 14 3 1

Gain on sale of fixed assets - - 1 1

56 35 34 21

Breakdown of expense from investment activities is as follows:



Loss on sale of fixed assets 20 20 - -




42

25. FINANCIAL INCOME/ EXPENSES

Breakdown of financial income is as follows:



Fair value gains on derivative financial

instruments 47 47 - -

Interest income 15 8 8 4Rediscount interest income from

repayments of aircrafts 13 6 2 -Foreign exchange gains from financial

activities - - 433 117

Other financial incomes - (2) - -

75 59 443 121

Breakdown of financial expenses is as follows:



Foreign exchange losses on financial

activities 414 141 - -

Finance lease interest expenses 90 41 77 37

Aircraft financing expenses 11 8 10 6

Interest expenses on employee benefits 2 1 2 1

Fair value losses on derivative financial

instruments - (9) 13 (34)

Other financial expenses - - 7 6

517 182 109 16

26. TAX ASSETS AND LIABILITIES

Breakdown of assets related to current tax is as follows:


Prepaid taxes 11 12

Tax liability is as follows:


Provisions for corporate tax 14 12

Prepaid taxes and funds (10) (2)

Tax liability 4 10




43

26. TAX ASSETS AND LIABILITIES (cont’d)

Tax expense is as follows:



Current period tax expense 14 4 - -

Deferred tax (income) / expense (186) (61) 166 72

Tax (income) / expense (172) (57) 166 72

Tax effect related to other comprehensive income is as follows:

Amount Tax Amount Amount Tax Amount

before tax expense after tax

before

tax expense after tax

Changes in foreign

currency translation

difference 4 - 4 ( 26) - ( 26)

Change in cash flow

hedge reserve 301 ( 60) 241 170 ( 34) 136

Change in actuarial

losses from retirement

pay obligation 3 ( 1) 2 - - -

Other comprehensive

(expense) /income 308 ( 61) 247 144 ( 34) 110

1 January - 30 June 20151 January - 30 June 2016

There is no taxation effect for the changes in foreign currency translation difference that is included in

other comprehensive income.

Corporate Tax

The effective tax rate is 20%.

In Turkey, advance tax returns are filed on a quarterly basis. Advance corporate tax rate is also 20%.

Losses can be carried forward for offset against future taxable income for 5 years. However, losses

cannot be carried back for offset against profits from previous periods.

Furthermore, there is no procedure for a final and definitive agreement on tax assessments. Companies

file their corporate tax returns between 1-25 April following the close of the accounting year. Tax

authorities may, however, examine such returns and the underlying accounting records and may revise

assessments within five years.

Income Withholding Tax

In addition to corporate taxes, companies should also calculate income withholding taxes and funds

surcharge on any dividends distributed, except for dividend receiving companies who are Turkish

residents and Turkish branches of foreign companies. Income withholding tax rate is 15%.

Undistributed dividends incorporated in share capital are not subject to income withholding tax.




44


Deferred Tax

The Group recognizes deferred tax assets and liabilities based upon temporary differences arising

between its financial statements as reported for IFRS purposes and its statutory tax financial

statements. These differences usually result in the recognition of revenue and expenses in different

reporting periods for IFRS and tax purposes and they are given below.

For calculation of deferred tax asset and liabilities, the corporate tax rate of 20% is used.

In Turkey, the companies cannot declare a consolidated tax return; therefore, subsidiaries that have

deferred tax assets position were not netted off against subsidiaries that have deferred tax liabilities

position and they are disclosed separately.

Breakdown of the deferred tax assets / (liabilities) is as follows:


Fixed assets (1,170) (1,138)

Adjustments for passenger flight liabilities (107) (75)

Tax loss carried forward 301 47

Income and expense for future periods 59 47

Accruals for expenses 41 45

Miles accruals 41 46

Provisions for employee benefits 26 24

Change in fair value of derivative instruments 24 94

Provisions for unused vacation 13 10

Other 11 13Deferred tax liabilities (761) (887)

The changes of deferred tax liability for interim periods 1 January – 30 June 2016 and 2015 are as

follows:

30 June 2016 30 June 2015

Opening balance at 1 January 887 655

Deferred tax expense (186) 166

Tax expense from hedging reserves 60 33

Foreign currency translation difference - (42)

Deferred tax liability at the end of the period 761 812




45


Deferred Tax (cont’d)

Reconciliation with current tax charge for interim periods 1 January – 30 June 2016 and 2015 are as

follows:


Reconciliation of effective tax charge 30 June 2016 30 June 2016 30 June 2015 30 June 2015

(Loss) / Profit from operations before tax (819) (283) 572 325

Domestic (expense) / income

tax rate of 20% (164) (57) 114 66

Taxation effects on:

- expense from investment certificates (8) (4) (5) (3)

- non-deductible expenses - - 2 2

- foreign currency translation difference 1 9 63 26

- equity method - (5) (2) (15)

- adjustment for prior year loss (1) - (6) (4)

Tax charge in statement of profit or loss (172) (57) 166 72

27. EARNINGS PER SHARE

Earnings per share disclosed in the consolidated financial statements of profit or loss and other

comprehensive income is determined by dividing the net income by the weighted number of shares

that have been outstanding during the period concerned.

In Turkey, companies can increase their share capital by making a pro-rata distribution of shares

(“bonus interest”) to existing shareholders from retained earnings. For the purpose of earnings per

share computations, such bonus shares are regarded as issued shares. Accordingly, the weighted

average number of shares outstanding during the years has been adjusted in respect of bonus shares

issued without a corresponding change in resources, by giving them retroactive effect for the period in

which they were issued and for each earlier year.

Earnings per share are calculated by dividing net profit by weighted average number of shares

outstanding in the relevant period.




46

27. EARNINGS PER SHARE (cont’d)

Number of total shares and calculation of earnings per share at 1 January – 30 June 2016 and 2015:



Number of shares outstanding at

1 January (in full) 138,000,000,000 138,000,000,000 138,000,000,000 138,000,000,000

New bonus shares issued (in full) - - - -Number of shares outstanding at

30 June (in full) 138,000,000,000 138,000,000,000 138,000,000,000 138,000,000,000

Weighted average number of

shares outstanding during the

period (in full) 138,000,000,000 138,000,000,000 138,000,000,000 138,000,000,000

Net (loss) / profit for period (647) (226) 406 253

Basic (loss) / profit per share

(Full US Cents) (*) ( 0.47) ( 0.16) 0.29 0.18

(*) Basic and diluted (losses) / earnings per share are the same as there are no dilutive potential ordinary shares.

28. DERIVATIVE FINANCIAL INSTRUMENTS

Breakdown of derivative financial assets and liabilities of the Group as of 30 June 2016 and 31

December 2015 are as follows:

Derivative financial assets 30 June 2016 31 December 2015

Derivative instruments for fuel prices

cash flow hedge 83 14

Cross currency rate swap agreements 49 77

Derivative instruments for interest rate

cash flow hedge 9 9

141 100

Derivative financial liabilities 30 June 2016 31 December 2015

Derivative instruments for fuel prices

cash flow hedge 158 485

Derivative instruments for interest rate

cash flow hedge96 68

Cross currency rate swap agreements 6 15

260 568




47

29. NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS

Foreign currency risk management

Transactions in foreign currencies expose the Group to foreign currency risk. The foreign currency

denominated assets and liabilities as monetary and non-monetary items are below:

USD

EQUIVALENT TL EUR JPY CHF OTHER

1.Trade Receivables 460 73 94 3 8 282

2a.Monetary Financial Assets 989 427 484 5 3 70

2b.Non Monetary Financial Assets - - - - - -

3.Other 354 189 66 5 5 89

4.Current Assets (1+2+3) 1,803 689 644 13 16 441

5.Trade Receivables - - - - - -

6a.Monetary Financial Assets - - - - - -


7.Other 74 6 60 - - 8

8.Non Current Assets (5+6+7) 74 6 60 - - 8

9.Total Assets (4+8) 1,877 695 704 13 16 449

10.Trade Payables 505 287 144 1 3 70

11.Financial Liabilities 691 2 420 249 20 -

12a.Other Liabilities, Monetary 1,030 873 111 44 1 1

12b.Other Liabilities, Non Monetary 67 67 - - - -

13.Current Liabilities (10+11+12) 2,293 1,229 675 294 24 71

14.Trade Payables - - - - - -

15.Financial Liabilities 6,565 - 3,466 2,891 208 -

16a.Other Liabilities, Monetary 9 4 5 - - -

16b.Other Liabilities, Non Monetary - - - - - -

17.Non Current Liabilities (14+15+16) 6,574 4 3,471 2,891 208 -

18.Total Liabilities (13+17) 8,867 1,233 4,146 3,185 232 71

19.Net asset / liability position of off-

balance sheet derivatives (19a-19b) - - - - - -

19a.Off-balance sheet foreign currency

derivative assets - - - - - -

19b.Off-balance sheet foreigncurrency

derivative liabilities - - - - - -

20.Net foreign currency

asset/(liability) position (9-18+19) (6,990) (538) (3,442) (3,172) (216) 378

21.Net foreign currency asset /

liability position of monetary items

(IFRS 7.B23) (=1+2a+5+6a-10-11-12a

-14-15-16a)

(7,351) (666) (3,568) (3,177) (221) 281

22.Fair value of foreign currency

hedged financial assets - - - - - -

23.Hedged foreign currency assets - - - - - -

24.Hedged foreign currency liabilities - - - - - -

30 June 2016




48

29. NATURE AND LEVEL OF RISKS DERIVING FROM FINANCIAL INSTRUMENTS (cont’d)

Foreign currency risk management (cont’d)

USD

EQUIVALENT TL EUR JPY CHF OTHER

1.Trade Receivables 327 40 111 4 9 163

2a.Monetary Financial Assets 994 185 760 1 1 47


3.Other 376 222 62 4 5 83

4.Current Assets (1+2+3) 1,697 447 933 9 15 293

5.Trade Receivables - - - - - -

6a.Monetary Financial Assets - - - - - -


7.Other 60 4 49 - - 7

8.Non Current Assets (5+6+7) 60 4 49 - - 7

9.Total Assets (4+8) 1,757 451 982 9 15 300

10.Trade Payables 417 220 136 1 2 58

11.Financial Liabilities 531 15 305 191 20 -

12a.Other Liabilities, Monetary 515 407 82 25 1 -


13.Current Liabilities (10+11+12) 1,530 709 523 217 23 58

14.Trade Payables - - - - - -

15.Financial Liabilities 4,916 - 2,367 2,333 216 -

16a.Other Liabilities, Monetary 7 - 5 - - 2


17.Non Current Liabilities (14+15+16) 5,042 119 2,372 2,333 216 2

18.Total Liabilities (13+17) 6,572 828 2,895 2,550 239 60

19.Net asset / liability position of off-

balance sheet derivatives (19a-19b) - - - - - -

19a.Off-balance sheet foreign currency

derivative assets - - - - - -

19b.Off-balance sheet foreigncurrency

derivative liabilities - - - - - -

20.Net foreign currency asset/(liability)

position (9-18+19)(4,815) (377) (1,913) (2,541) (224) 240

21.Net foreign currency asset / liability

position of monetary items (IFRS 7.B23)

(=1+2a+5+6a-10-11-12a-14-15-16a)

(5,065) (417) (2,024) (2,545) (229) 150

22.Fair value of foreign currency hedged

financial assets - - - - - -

23.Hedged foreign currency assets - - - - - -

24.Hedged foreign currency liabilities - - - - - -

31 December 2015




49



Foreign currency sensitivity

The Group is exposed to foreign exchange risk primarily from EURO, JPY, CHF and TL. The

following table details the Group’s sensitivity to a 10% increase and decrease in EURO, JPY, CHF

and TL. 10% is the sensitivity rate used when reporting foreign currency risk internally to key

management and represents management’s assessment of the possible change in foreign exchange

rates. The sensitivity analysis include only outstanding foreign currency denominated monetary items

and adjusts their translation at the period end for a 10% change in foreign currency rates. The

sensitivity analysis includes external loans as well as loans to foreign operations within the Company

where the denomination of the loan is in a currency other than the currency of the lender or the

borrower. A positive number indicates an increase in profit or loss with a same effect on equity.

If foreign currency

appreciated

10 %

If foreign currency

depreciated

10 %

1- TL net asset / liability (54) 54

2- Part hedged from TL risk (-) - -

3- TL net effect (1+2) (54) 54

4- Euro net asset / liability (344) 344

5- Part hedged from Euro risk (-) - -

6- Euro net effect (4+5) (344) 344

7- JPY net asset / liability (317) 317

8- Part hedged from JPY risk (-) - -

9- JPY net effect (7+8) (317) 317

10- CHF net asset / liability (22) 22

11- Part hedged from CHF risk (-) - -

12- CHF net effect (10+11) (22) 22

13- Other foreign currency net asset / liability 38 (38)

14- Part hedged other foreign currency risk (-) - -

15- Other foreign currency net effect (13+14) 38 (38)

TOTAL (3 + 6 + 9 + 12 + 15) (699) 699

30 June 2016

Profit / (Loss)




50



Foreign currency sensitivity (cont’d)

If foreign currency

appreciated

10 %

If foreign currency

depreciated

10 %

1- TL net asset / liability (38) 38

2- Part hedged from TL risk (-) - -

3- TL net effect (1+2) (38) 38

4- Euro net asset / liability (191) 191

5- Part hedged from Euro risk (-) - -

6- Euro net effect (4+5) (191) 191

7- JPY net asset / liability (254) 254

8- Part hedged from JPY risk (-) - -

9- JPY net effect (7+8) (254) 254

10- CHF net asset / liability (22) 22

11- Part hedged from CHF risk (-) - -

12- CHF net effect (10+11) (22) 22

13- Other foreign currency net asset / liability 24 (24)

14- Part hedged other foreign currency risk (-) - -

15- Other foreign currency net effect (13+14) 24 (24)

TOTAL (3 + 6 + 9 + 12 + 15) (481) 481

31 December 2015

Profit / (Loss)

30. EVENTS AFTER THE BALANCE SHEET DATE

None.




51

31. OTHER ISSUES AFFECTING FINANCIAL STATEMENTS MATERIALLY OR

NECESSARY TO MAKE FINANCIAL STATEMENTS SOUND, INTERPRETABLE AND

UNDERSTANDABLE

Condensed consolidated interim financial statements of the Group are prepared comparatively with the

prior period in order to help analyzing financial position and performance. To keep consistency, with

current year consolidated interim financial statements, comparative information is reclassified and

significant changes are disclosed if necessary. So, the Group has made below reclassifications in the

prior year consolidated interim financial statements in order to maintain consistency with current year

consolidated interim financial statements.

- Fair value loss of fuel derivative instruments amounting to USD 35, which was disclosed

under “Cost of Sales” in the period 1 January – 31 March 2015 is reclassified to fair value

gain/ losses on derivative financial instruments, which is disclosed under “Financial

Expenses”. - Fair value gains of fuel derivative instruments amounting to USD 1, which was disclosed

under “Cost of Sales” in the interim period 1 January – 30 June 2015 is reclassified to fair

value losses on derivative financial instruments, which is disclosed under “Financial

Expenses”.

tÜrk hava yollari anonİm ortakliĞi and its subsidiaries · 2016. 8. 19. · tÜrk hava yollari...

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